Nippon Steel Corp., Japan's largest steelmaker, will build its first construction steel plant outside of the country in Vietnam to benefit from rising demand in Southeast Asia.

The US$31 million factory will start operations at the Phu My II Industrial Park in May 2011, the Tokyo-based company said in a statement on its website. Nippon Steel will take a 51 percent stake, Vietnam Steel Corp. will hold 10 percent, with the rest held by five Japanese trading companies, it said.

The Nippon Steel-led group is counting on Vietnam's plans to build ports, roads, railways and power stations to drive metal consumption as demand in Japan stagnates.

Kobe Steel Ltd., Japan's fourth-largest steel mill, may start construction of its planned $1 billion plant in Vietnam this month, the government said June 30.